GBP/USD Found Support At 1.32040 And Began A Correction

The pair broke out below the trend channel in the zone around 1.3675, continued depreciating and found support only once it reached 1.32040.

The first target of the correction to the upside – 1.3450 – has already been reached, but I think this won’t be the end. I expect the corrective move north will continue toward 1.3550 – 1.3600 after which the downward trend will be renewed.

The 1.32 level is a very strong support both on the W1 and monthly time frames and if the pair manages to break out below it and remain below it we could expect that the downward trend will continue with a test of the support in the zone around 1.1985 – 1.2000.

The alternative scenario is for a renewal of the medium term rally of the GBP to 1.3820 – 1.3850.